Former Goldman Sachs trader sues for $20m in bonuses

Michael Moore and Chris Dolmetsch

A former Goldman Sachs Group trader who helped lead the firm's bets against subprime mortgages before the financial crisis asked a court to throw out an arbitration ruling denying him more than $US20 million in unpaid compensation.

Deeb Salem encountered a ''kangaroo court'' and a ''shocking and blatant miscarriage of justice'' as Financial Industry Regulatory Authority arbitrators didn't allow him to call some of Goldman Sachs' top trading executives as witnesses, he said in a complaint on Friday in New York State Supreme Court. Mr Salem, 35, said that members of the industry-funded regulator's arbitration panel called his case ''ridiculous'' and ''bulls---'' during a hearing.

Mr Salem left the firm in May 2012, a year after a US Senate subcommittee said he and other Goldman Sachs traders tried to manipulate prices of derivatives linked to subprime home loans in 2007 for their own benefit. The subcommittee's assertions were based in part on Mr Salem's discussion of an attempted short squeeze in his self-evaluation, a finding that Mr Salem said ''put too much emphasis on 'words','' according to the Senate report.

The three-person Finra arbitration panel said in a March 17 decision to dismiss his case that even if the witnesses said what Mr Salem maintained they would, he hadn't established a legally enforceable claim for the bonus money.

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''Employees trade their rights to go litigate in court and get smart judges to review their circumstance in exchange for an expedited hearing on the merits,'' Jonathan Sack, Mr Salem's lawyer, said. ''Deeb Salem got neither.''

Mr Sack said his client was ''used as a scapegoat'' by Goldman Sachs. Mr Salem left the bank on his own accord and started at New York-based hedge-fund firm GoldenTree Asset Management LP.